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ISDA 1995 English Law Credit Support Annex
In a Nutshell™ Section 6:
Paragraph 6. Default.
If there is an Early Termination Date following an Event of Default on a party the Credit Support Balance, determined as if the Early Termination Date were a Valuation Date, will be an Unpaid Amount owed to the Transferor under Section 6(e). For the avoidance of doubt, if Market Quotation applies then the Market Quotation for the Transaction constituted by this Annex will be zero; if Loss applies, the Loss for the Transaction will be just the Unpaid Amount representing the Credit Support Balance.
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1995 CSA full text of Section 6:
Paragraph 6. Default.
If an Early Termination Date is designated or deemed to occur as a result of an Event of Default in relation to a party, an amount equal to the Value of the Credit Support Balance, determined as though the Early Termination Date were a Valuation Date, will be deemed to be an Unpaid Amount due to the Transferor (which may or may not be the Defaulting Party) for purposes of Section 6(e). For the avoidance of doubt, if Market Quotation is the applicable payment measure for purposes of Section 6(e), then the Market Quotation determined under Section 6(e) in relation to the Transaction constituted by this Annex will be deemed to be zero, and, if Loss is the applicable payment measure for purposes of Section 6(e), then the Loss determined under Section 6(e) in relation to the Transaction will be limited to the Unpaid Amount representing the Value of the Credit Support Balance.
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Related Agreements
Click here for the text of Section 6 in the 1995 English Law CSA
Click here for the text of Section 6 in the 2016 English Law VM CSA
Click [[{{{3}}} - NY VM CSA Provision|here]] for the text of the equivalent, Section [[{{{3}}} - NY VM CSA Provision|{{{3}}}]] in the 2016 NY Law VM CSA
Comparisons
1995 CSA and 2016 VM CSA: click for comparison
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